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tv   [untitled]    April 16, 2012 1:00pm-1:30pm EDT

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doing a very good job. that's allowing them to attract a lot of economic development. i think jobs training is an important part. related to that is creating a series of what i would call vocational colleges. i think part of the american dream is not just the house, but it's also sending your children to college. we define college almost as a liberal arts degree but rather than a different kind of degree. obviously there's engineering, but we also need to be training workers. we need to be thinking about four year colleges that are in essence what i did at the wharton business school. i spent half of my time getting a liberal arts degree and a trade. that trade for my case was business. i think the other trade for others could be welding or computer technology that's required for manufacturering and other things. we have not encouraged our children to go into those fields. they were viewed as dead fields and that's not the case now. there's lots of opportunity. when i think about it, if i think about experiences with service jobs if you're going to
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go work at a pharmaceutical place or a retail shop you're going to get a job in the service business that's going to pay entry level around $10. if you're in manufacturing those wages as everybody knows are far more than $10 an hour. those are very good jobs. that's the basis of the middle class of the country. that's the basis of a lot of our competitiveness and those are looking at entry levels of $15, $18 kind of jobs. that's a huge difference. there's lots of opportunity. and there's a good role for government to play in this. i'm not much of an interventionalist from that standpoint. like the bank and other things. there are things that the government can do that will keep us on a relatively level playing field with everybody else. there's something that we have to recognize and say that is an important role for government. >> i want to come back to the skills question in a minute. but before i want to make sure we're bringing in the experts. dave, you talked a bit about the competitive challenges you face in export markets. the issues of finance and the
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issues of government support for r and d. give us the landscape there. as a u.s. company with the level of government support you get, you're competing with french companies, competing with chinese, how does it stack up? what are the major challenges that we face there and are there things that the government's not doing that it should be doing that would make a big difference? >> let me cite, too, challenges that we face in our business. and put them in perspective of what has allowed u.s. satellite builders to command more than a 50% market share despite the growth of foreign competition over the last couple of decades. the fundamental competitive advantage that orbital and our companion u.s. satellite manufacturers have is we've been
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able to go through incremental improvements pretty frequently on an annual or twice a year cycle in some cases to make small technology advances on a steady basis over many decades. and looking back now on the time we've been in business which has been about 30 years we've seen about avn 11% to 12% improvement in the fundamental economic figure of merit of commercial satellite since the early 1980s. that's essentially the capital cost required to build a satellite for a certain amount of communications capacity. if you integrate an 11% or 12% per year improvement over three decades, it turns out what you get are products today that are about 25 times more effective than products of 30 years ago were in this fundamental figure of merit. now we've been able to do that
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to date by virtue of fairly vigorous investment in product research and development. applied to some really bright engineers and scientists. it's in those two latter areas that we increasingly face the toughest outlook in our export business. first of all, with regard to research and development incentives, as i mentioned earlier state funded r and d is pretty common in europe and very common in china. but generally not so today in the united states. now it was true that in decades past u.s. government investment in space technology driven by the need for national security and other public sector functions often resulted in spin
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off benefits to commercial satellite builders. that was true in the '70s as the industry was getting started and through the 80s. but sometime in the '9 0z and certainly in the last decade, the flow of technology reversed. on a net bea sis we see more technology being created in the commercial sector that's then being adopted for use in the government programs as budgets have gotten tighter and as the level of performance of commercial technology has -- because of shorter cycle times has advanced more. therefore to stimulate continued private r and d investment by u.s. companies, i feel that the congress should adopt a more -- a longer term approach to r and d investment incentives. for those that follow it you may know that the r and d tax
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credits that help in this regard have been -- have been somewhat problematic in recent years. and so looking ahead instead of relying on one year in some cases one year retro active r n reinstatements of the r and d credit it would be highly desirable to see a five or ten-year extension of that mechanism and that it be simplified and strengthened to put it more on par with the economic incentives that many of our european and asian competitors enjoy. in the second area has to do with the technology workforce that we rely on in our company and i think this is true in other u.s. satellite builders. about half of our employees are engineers and scientists. and we rely on the young kids
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coming out of school to a pretty significant extent. the average age of our engineering staff is in the 30s. now today u.s. universities are doing a great job of training students in the fundamental engineering disciplines that go into building satellite, aero space engineering, mechanical, electrical engineering and so son. they do this not only for kids that grow up in the u.s., but for bright young people that come to our country from all around the world to obtain the best possible technical education they can get in fields that underpin our sector and other technology areas. unfortunately our limitation limits on foreign born u.s. educated engineers and scientists i think are increasingly out of touch with the global competitive realities
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we face. today, for instance, across all of the engineering schools in the united states, a little over 50% of ph.d candidates in engineering and 40% of master's degree candidates are engineering are foreign nationals. now many of these young people want to stay in the u.s. and make their homes here, raise their families here, build their careers here, but we prevent some of them from doing so because of the restrictions that we place both on temporary work visas and also the fairly lengthy process that's involved in converting a temporary work permit into permanent citizenship for these really highly skilled technology workers. so i would hope to see that improvements in that area being a part of our country's
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immigration reforms in the near term. >> it's interesting to note that there is actually a growing bipartisan consensus in congress on moving on some of the immigration issues. there's always things that block the steps. the house in the fall passed overwhelmingly bipartisan vote was blocked in the senate. we keep coming back. i'm going to get back to exports in a second. we keep coming back to this question of a skilled workforce. i want to ask both the chief executives. what's the corporate responsibility here? we talked a about the government isn't training workers. a lot of companies used to have apprentice programs that have disappeared. do the companies need to be more active either directly or in working with vocational institutions and making sure that they have the workforce they need here in the united states? >> certainly. i think we -- in our case we do work and especially in support
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of our dealers with trained technicians and a number of areas with community colleges to set up training programs to develop those skilled technicians. you can only do that at the local level. most places if somebody is born in that area, they're going to stay in that area. you're not going to get somebody who wants to move to the town. at that level, we can. i think what dave is talking about and we have the exact same example, most people think a company that's ag equipment probably doesn't need all of that. but if you take our large tractors we have more lines of code, software code on that tractor than the space shuttle has in one tractor. it is -- we have seven computers on board that's processing all kinds of information realtime. and so we have a tremendous need for embedded software engineers. you can't find them. you can't get them. you can't keep them here. we have a technical center in
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india that we put in place about ten years ago it's now up to 3,000 people. the cost of an embedded software engineer operating in india is no cheaper than embedded software engineer operating in waterloo, iowa. we're there because that's where we can get a lot of talent and keep it. here, we cannot get -- first of all you don't have enough u.s. born embedded software engineers being educated right now. that's where companies like us, a lot of companies, business round tables working on the stem project trying to get more people, but that takes a long period of time before they go through the system, come up. in the meantime, you've got to be able to take the ones that are educated here and offer them jobs here so that you can keep the nucleus here. there's going to be a day when so much of the nucleus is going to be someplace else that you're going to wake up and say if 2/3 of our r and d staff is over there, why don't we just move the r and d center there.
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>> i find it a frustrating part of the competitiveness debate. there are a lot of things that they're growing faster business wants to be near those opportunities. but to lose investment because of a lack of skilled workforce, seems something the u.s. ought to be able to deal with. >> any other comments on the corporate world? >> i would just add that apart from a variety of initiatives that both carried out in the private sector and led by governments to improve the supply of technology workers that i think many industries are also addressing in a sense the demand side of that equation. a number of studies have been done in recent years looking within aero space and defense as kind of our home industry sector
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at the efficiency with which companies use their engineering and scientific brain power and these studies have pointed to areas where we could make improvements. where we could bring on board a little different mix in our workforce to free up our r and d engineers so they can spend, you know, 95% of their time doing the things they're really good at doing and they love to do in research and development and minimize the amount of their time that's being consumed by work that could probably be done by somewhat lower skilled level individuals. so we've got to work on both sides of that equation. i think they're -- there's a lot of work for productivity improvement on the demand side as well as pipeline improvement
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on the supply side. >> thank you. i want to bring the conversation back to the topic for what we're all assembled here, which is export finance. at the risk of inviting my criticisms of our host, how does the u.s. do on that front? when you look at what the u.s. offers in export finance compared with the germans or french or nadians or others, what are the things we do well? what are the things we could do better? how does the u.s. measure up in this part of the equation? anybody want to start us off here? >> let me first say we're thankful we have it. it doesn't provide an advantage, it eliminates a competitive disadvantage. without it there are definitely deals we would not be able to do. i think the risk tolerance profile that the bank has
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certainly is not as high as a number of other countries banks or similar institutions would have. what we're talking about is going into areas where there is risk. that's where there's advantage with this. it's not about doing it in various stable markets. certainly in an environment like today where there's a question on whether the bank out to survive or not, then obviously the risk profile goes down. so it becomes, people become less willing to do a deal. i think the other thing that clearly from our standpoint what we see many of our competitors they're able to from the start of trying to develop a deal to the point when the transaction is finally approved that cycle time is much, much shorter and a business like ours when you get the order the person needs the product right away to get into the field you really need that very, very short cycle time.
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that's an opportunity for improvement. you know, i think if to be fair i think if the bank officials were here they would number one all say yep, we recognize it. two, we're in an environment where we're supported continuous improvement can happen and we can work on those things. i think a part of what we're seeing today and some of the less competitive aspects deal more with some of the head winds that the bank is facing at this point in time. >> all right. dave, you want to add anything on that? >> i think i would agree with what sam said. our experience with export, import based export financing has been more limited. i think the first major transaction that orbital did was about five years ago. our direct experience the more
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limbed. i would say over the last few years several business pursuits that fortunately had happy endings for us, export import was a terrific partner. and from what i've heard about cycle time and so on from years past, it seems the improvements have been significant and those are very much appreciated in our business and i've heard comments by some of the other u.s. satellite company executives that bear out our own experience. so the trends sure seem to be moving in a good direction. >> let me -- we're winding down our time. i want to ask a big summary question. because behind all of these debates over competitiveness, you certainly see it in the debate over export finance. it's a real debate on the appropriate role of government and the government business
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relationship. if i go back to this harvard business school study that i'm mentioned at the outset. it was quite interesting when the executives were asked what are your chief recommendations for improving u.s. competitiveness? the top ones were government get out of the way recommendations. simplify the tax code or reduce regulatory burdens. a number has been things we discussed here. invest in k to 12 education. invest in workplace training. proper incentives for research and development. is there any way to kind of summarize in a way that maybe cuts through some of these debates what the appropriate role for government ought to be and how much it's a government get out of the way and the government actively assist role. maybe i'll start with you sam because of the council hat that you wear and you do a lot of thinking about this. >> well certainly there is a
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role for government. i think there's a role for government to help stimulate. i also think that as fred eloquently said early on, we can't wait for this perfect world. i think when we talk about less government, we're talking about a perfect world where everybody gets to compete. that's not the case. we are an environment where you need a carrot and a stick. i think the government can provide in providing the carrot and the stick. when the playing field is not level, i think the appropriate role really to look to see is the playing role level. not looking to see if you're driving competitive advantage. then you're two faced if you're talking to various areas. i would just argue that leveling the playing field is the tax code and if i could just say two
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other things the government could do if they would have, i focus on r and d tax credits because you don't have innovation without r and d and long-term that will be a driver for job creation no matter what industry. the other one would be 100% accelerated depermanently. when you're in that environment people put in capital intensive projects. >> i would say the most legitimate role for government is the social goods. the k through 12 education. the foundations. in essence the infrastructure of the country. some of which are bridges, some of which are tunnels. some of which are education. i think we have fallen down on doing that in many ways in supporting the basic infrastructure in its broadest definition not just the bridges and tunnels and airports.
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we need to move forward on that because we are falling behind. you watch what china does. i necessarily don't hold them up as an example of everything going right. there's a lot more effort in that area. we'll find the playing field will be very much tilted against us if you don't take action now. it's a long-term thing. in today's environment that's a lot more difficult to deal with. i also think there's roles for government to rethink things including regulation. there's a lot of regulations that are important. i want clean water. i want food that's safe to eat. there's also a lot of regulation that sort of comes from a different time. that are still on the books and there's room for the government to do improving. nobody wants us to be in a polluted world. but the fundamentals are we're
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living with a lot of regulations that come from a different era that are not achieving what they were intended to be doing. and it would be a helpful thing for the country if we went ahead and did a pruning. that may be taking out 5% of the regulation. it's the ones that aren't affecting the quality of life. i think we've not done that. there's a lot of roles that government can play in that. over all it's the social goods that a deere or or bit tal can't do for themselves. it is something we need to do as a nation rekdsing the funding issues in balancing the budget and all the things that take place and all the buildings near here. we do need to come back and make some real hard choices.
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i think the environment where we can make the choices comes sooner rather than later. >> it's a very nice way to think about it. our reporter talks about investing in the commons. that's what you're getting at. on the flip side i have a brother who's worked as a small farmer and businessman. his government regulation is different than mine. he can tell you some horror stories of what it's like to operate with government. >> we can cut a lot of those without the social good aspect. >> we're just about out of time. >> it's hard to add much to the good recommendations that you've just heard. i guess the one dimension i might bring to the list though would be the temporal one. i think most of our leaders in government today and certainly our companies and our citizens
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understand very clearly that the global economic environment that we live in is quite different than the one that grew up in. and many of our international competitors, although, i think fundamentally have less sustainable and less humane forms of public sector organization in government do make decisions faster. one of the essential genius of the founders of our country was to build in the checks and balances and the separation of powers that create the need for compromise. and other a couple hundred years our country most of the time has been pretty good at coming up with smart and reasonable compromises. we've got to do that faster, i
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think these days. we can't -- we can't keep kicking the can down the road to some future congress to solve some of these fundamental problems that you've heard about from us because the pace of technology development and economic growth around the world is much faster now than it was even a decade or two ago. in addition to those recommendations i would hope that we would see the kind of political leadership we need from both parties, from both ends of pennsylvania avenue to make -- to make the tough deals that the country needs and to make them a lot sooner rather than later. >> thank you very much. my understanding is we'll have a brief break while we set up for president clinton. let's join me in thanking our panels for a tremendous discussion full of insight.
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thank you very much. [ applause ] both the house and senate gavel in today after a two-week recess. the senate moves on moving forward with the buffett rule. a plan to tax millionaires at 30%. the house will consider this week tax cuts for small businesses this year. watch the house live on c-span and the senate live on c-span2.
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>> frankly, we owe it to our first responders to give them a modern communications network. and that's exactly what this legislation does. so congress created first put it under ntia and then indicated that $7 billion from auction revenues would be make available to first net to go ahead and design and construct this network. >> tonight national telecommunication and information administration head on spectrum policy and other telecommunications issues at 8:00 eastern on the communicators on c-span2. >> it's been nearly ten years since the release of robert caro's volume of the years of lyndon johnson. in a few weeks the fourth volume will be powered. here he is on q and a in 2008 with an update on how volume
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four was taking shape. >> this is really a book not just about lyndon johnson but about robert kennedy and jack kennedy and the interplay of their personalities particularly robert. and thest a very complicated story. but i don't think people know of two very complicated people and robert kennedy and lyndon johnson. and i had to really go into that and try to explain it. it is part of the story all the way through the end of jok's presidency. that's done and i suppose chronologically at the moment johnson is passing the 1965 voting rights act. and that's sort of in one way we're up to now. >> watch the rest of this interview and other appearances by robert caro online at the c-span video library. and watch for our upcoming q and a interview with him on sunday,
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may 6th. the official at the center of the latest general services administration scandal is expected to remain silent. jeff neely heads the pacific rim office. he's been put on administrative leave. mr. neely orgdsed an october 2010 las vegas gsa conference with expenses of that topping $800,000. you see the chair here about ready to take his seat as he greets people at the witnesses stand. other witnesses include the former head of the agency martha johnson. she resigned after the gsa npsor general released a report on the conference. the inspector general himself will be testifying, brian miller. recently referred to the las vegas matter to the justice department for a possible criminal charges.


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